Collective Cafe To Go: A discussion on the airline industry and Web3

Every Monday to Friday from 8 to 9 am EST, host of Alpha Collective, Joseph Jaffe chairs a lively discussion in the Collective Cafe to discuss all things Business of Web3, culture, community, and more.

Attending every morning for virtual coffee is free. Just join the Discord server, however if you want to be able to join the stage at any time and/or start your own coffee throughout the day, you will need to purchase a membership pass to the Alpha Collective here alphacollective.xyz or mint.alphacollective.xyz.

As a paid member you’ll have access to these regular discussions, as well as a host of different resources, conferences, and more, including – but not limited to – 52 Alpha Talks over 52 weeks, IRL events, networking and workshops.

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In this tl;dr summary from our session on December 1st, 2022, we discussed the (often frustrating) experience of flying and the airline industry.

Littered with tons of legacy systems and inefficiencies, it seems that the airline industry should be one of the first to adopt as many customer innovation programs as possible to keep up with the consistent demand. Yet, as the discussion will get into below, airlines seem to be just content in archaic practices that don’t really make that much sense.

The conversation today also grapples with the many reasons why this might be the case and how Web3 can actually build a strong foundation for the future of airline customer management.?

Key Discussion & Takeaways

These specific discussion points can be applied across the board to the airline industry, but equally can be applied to the hotel, car rental, vacation business as well and it's likely that the points raised here will be salient to others’ experiences as well. What comes next will make most scratch their heads and ask why the industry hasn’t moved beyond such old and tired systems.

Innovation Should Speak for Itself

First, it’s an interesting point to be made about how difficult we perceive innovation to be in the current business environment. Often managers, marketers, and entrepreneurs are beset with an instant “no” regarding any particular plan; it’s commonly understood that people need to fight for their ideas to be heard and implemented or risk it getting the door shut on its face.?

Yet shouldn’t the point of innovation be to improve the general environment, features, or overall experience of a given product/service? If that’s a common understanding of how innovation works, then people should have to fight to even conceive of saying “no”. It’s the “yes” part that should be easy; “yes” should be the obvious answer. The reason for this is that great innovation isn’t just a gimmick a company runs for easy exposure but one that leads to its future sustainability, competitive advantage, growth, and survival. If these mattered (and they do), then innovation should be met with a resounding “yes”!

The Problem with Legacy Airline Miles Systems

Jumping now into the main narrative of the discussion, it’s interesting to see how opaque and inefficient the airline miles system has become over the years. Imagine being a frequent traveler that has earned the highest tier of service and with it, a specific perk that allows an individual to upgrade their airline seat at any time (even referred to as an “anytime upgrade.”)

Only what companies do now is to attach all these little loopholes into their services so that at the end of the day, no one gets to enjoy any of the perks at all. Despite having status and having rightly earned the promised benefits, in this example, the perk can’t be used because the tickets were purchased with “earned” miles instead of fiat. Exacerbating this example, 30 seats out of 40 possible seats in business class were empty.

The company doesn’t lose anything by letting its loyal customer use the earned perk and, the incremental cost of the blanket, pillow, meal and drink service should be relatively marginal.

Yet the company mandate dictates that only this one specific way works.?

The Monkey Parable: Fear of the Negative Outcome

This, then, ties back into that discussion around negativity and the perceived easiness of “no”. If you don’t know the organizational culture monkey parable, then here is an abridged version:?

There are 5 monkeys in a room and they’re all trying to get to the pile of bananas in the center. The problem is any time they get close to the bananas they get doused with water (which is an unpleasant experience, to say the least). They keep trying and keep getting doused until it’s become understood to them that this happens. Now they change out each monkey one by one, introducing a new monkey into the room. The new monkeys are dissuaded from trying due to the negative consequences. As it transpires, you end up with a room full of new monkeys and a pile of bananas that no one will touch but no one will understand why.

This is just to say that often the market is inundated with rules and ideas that are there due to some preceding experience that led to the development of a specific way of doing things. Yet left unchecked, these once helpful guides can become hurdles for reaching an obviously good thing at the center of a situation. Companies and consumers might see bananas in the center of the room, but they are all afraid to get to it without even knowing why.?

What if there was a better way?

Tokenization, Universal Currency, and Brand Loyalty

Obviously, the airline industry is much more complex than wanting a banana, but not by as much as people might think. Companies obviously want to keep people flying with them, but their reliance on a specific commerce system of miles and dollar values cut them short of reaching newer ways to garner brand loyalty.?

It’s here we can look at the many innovations of Web3, tokens, and the general crypto space to expand that environment of benefits for both the company and the consumer at large. Imagine utilizing the power of social media to increase your brand’s awareness while being able to authentically and efficiently reward consumers to do so. A tweet can be leveraged and compensated with a universal form of currency that allows customers to further their relationship with brands. NFTs can be leveraged to better understand just how loyal a customer has been to a particular company, using that word-of-mouth and influence power even more.

A consumer wallet that contains an entire history of purchases, activities, redemptions and even company interactions take the guesswork out of customer service. Overlay that with birthdays, anniversaries, flying preferences and personal priorities and you have the recipe for surprise and delight.

Every flight attendant should know if they have an Executive Platinum in 30D, a Diamond Medallion in 53F or Premier 1K in 22G.

What if every ticket stub was issued as a POAP (Proof of Attendance Protocol)?

What if there was an NFT collection that offered its owner unlimited flights on a small inventory of Web3 seats, obtainable pending availability on “day of” standby travel?

The possibilities are endless.

The Business of Web3 and the Airline Industry

The airline industry is one of the toughest shells to crack, with their insistence on risk mitigation rather than the more opportunistic risk management perspective. One way people can better influence these business practices is to come together as a community and really dig deeper into what Web3 can do for this industry and many others as well. That’s exactly what Joseph and the rest of Alpha Collective is trying to do, and are inviting others to join in this cause for more innovation in traditional spaces. After all, it should be easier to get that “yes” for future growth and survival.?

We will be dedicating an entire month in 2023 to the Travel & Leisure industry, where we will collectively Mastermind a "Business of Web3 Playbook," filled with use cases, guidelines and guardrails.

Join us!

PS In this hypothetical example (which you may well surmise was actually real), the eVIP Certificate that was never used is now set to expire. It shouldn’t. What if it were minted as an NFT and airdropped into a wallet, it could be HODL’d (hold on for dear life), redeemed, or even listed and sold on the secondary market AND the “creator” - in this case the airline, would even get a creator fee on the transaction.

Ain’t Web3 grand: shared values, shared ownership, shared reward!